Trump’s Crypto Plans Get Wall Street CEOs Excited About Digital Assets

Just a few days later President Donald Trump In the second administration, Wall Street is singing a different tune about cryptocurrencies.

“For us, the equation really turns on whether we, as highly regulated financial institutioncan act as transaction makers”, Morgan Stanley executive director ted selection he told CNBC on Thursday at World Economic Forum in Davos, Switzerland.

The new optimism among a growing number of banking executives who were in Davos this week is tied to Trump’s pro-cryptocurrency agenda. Trump, a vocal cryptoskeptic in his first term, flipped on the issue during his 2024 campaign and came to trust the The money of the crypto industry. in his effort to defeat former Vice President Kamala Harris.

The president issued a statement on Thursday sweeping executive order on cryptowith an emphasis on “protecting and promoting” the use and development of digital assets. Banks have been reluctant to support cryptocurrencies and allow transactions until now, largely due to the government’s position. The SEC has brought more than 200 cryptocurrency-related enforcement actions since 2013. according to cornerstone research.

“We will work with Treasury and other regulators to figure out how we can deliver that safely,” Pick said.

Trump has nominated several cryptocurrency advocates to critical positions throughout his administration. They include Paul Atkins to chair the Securities and Exchange Commission, where he was a commissioner under President George W. Bush. Howard Lutnick, CEO of Cantor Fitzgerald, is Trump’s nominee for commerce secretary, and hedge fund manager Scott Bessent was tapped to run the Treasury.

If confirmed, Bessent would oversee the IRS and the Financial Crimes Enforcement Network, which play key roles in shaping tax and compliance policies for crypto transactions and establishing guidelines for cryptocurrency adoption in the US.

Pick says Morgan Stanley will work with federal regulators to determine whether it is possible to deepen the bank’s ties to cryptocurrency markets. His company has been more aggressive than its Wall Street peers.

In 2021Morgan Stanley became the first major US bank to offer its wealthy clients access to bitcoin funds. Last August, he was Wall Street’s first major player. let your financial advisors start offering clients some of the bitcoin exchange-traded funds that launched early last year. Until now, wealth management firms have only facilitated transactions if clients requested exposure to the new crypto spot funds.

Pick suggested that the more Bitcoin infiltrates the mainstream, the more it is seen as a legitimate part of the financial system.

“The longer you negotiate, the perception becomes reality,” he said.

bank of america executive director Brian Moynihan echoed a willingness to embrace cryptocurrencies, specifically as a payment option, if the regulatory environment changes under the new administration. Speaking at Davos, Moynihan emphasized that clear guidelines could unlock broader adoption.

“If the rules come in and make it a real thing that you can actually do business with, you’ll find that the banking system will come in hard on the transactional side,” Moynihan said in a statement. interview Tuesday with CNBC.

Moynihan, who runs the second-largest bank by assets in the US, noted that cryptocurrencies could become “just another form of payment,” as Visa, MasterCard either Apple Pay. However, he avoided talking about cryptocurrencies like bitcoin as investments or stores of value, calling them “a separate issue.”

Another major obstacle to Wall Street’s adoption of cryptocurrencies has been an accounting rule, issued by the SEC in 2022, that requires banks to classify cryptocurrencies as liabilities on their balance sheets. The rule has subjected those assets to strict capital requirements, which has significantly increased the financial and regulatory risks of offering cryptocurrency custody services.

Efforts to repeal the rule, known as SAB 121, won bipartisan support in Congress last year. But then-president joe biden vetoed the proposed legislation, leaving the rule intact and further deterring banks from adopting digital assets. Banks have largely been prohibited from expanding their cryptocurrency offerings beyond derivatives trading and offering ETFs to wealth management clients.

“At the moment, from a regulatory perspective, we cannot own” bitcoins, Goldman Sachs CEO David Solomon told CNBC in an interview in Davos this week. He said the bank would revisit the issue if the rules changed.

On Thursday night, the SEC terminated SAB 121, which could open the door for banks to custody cryptoassets without such onerous capital requirements.

“Goodbye SAB 121! It hasn’t been fun,” wrote SEC Commissioner Hester Peirce, who on tuesday was chosen to lead a new “crypto working group”, in a publish in X Thursday night after the decision.

Bitcoin hit a record high of nearly $110,000 on Monday ahead of Trump’s inauguration, sparking broader gains in the cryptocurrency market. As of midday Friday, it was trading at around $106,000.

— CNBC’s Hugh Son contributed to this report.